Production Economics

Published: 10 Feb 2014

Producttion economics fact sheet

Are you maximising your profits?

Getting the most profitable results from your farm business requires a careful balance of input costs to produce the optimum yield.

Key Points

  • Every business has limited productive resources, including land, labour, management and capital. 
  • Production economics provides a framework for decision making about how best to use these limited resources to maximise profit. 
  • Maximising yield is not the most useful basis on which to make decisions about production. 
  • Understanding ‘marginal cost’ and ‘marginal return’ is very important when making production decisions. 
  • It is critical to know the impact of increasing inputs on working capital – does it limit your ability to do other things?

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GRDC Project Code AES00006

Region National, North, South, West

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Region: National; North; South; West

GRDC Project Code: AES00006